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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Revenue more than doubled in the fourth quarter to $180.7 million as 1.5 million new subscribers took to Clearwire's high-speed Clear wireless network, built in partnership with Sprint Nextel (NYSE: S ) . Analysts were expecting $195.7 million in revenue and a much smaller net loss, The Associated Press reported.
Now what: So why the run-up? Give investors credit for seeing the forest for the trees. Clearwire is in the tech equivalent of an annuity business that requires a massive amount of upfront spending. But if the subscribers come -- and by the look of last night's report, they will -- capex will be paid for many times over by years or even decades of high-margin service revenue. Akamai Technologies (Nasdaq: AKAM ) has followed this same trajectory, with market-crushing results for our Motley Fool Rule Breakers subscribers.
Benefits will begin to accrue next year. Executives say Clearwire will be profitable on an EBITDA basis in 2012. Don't be surprised if, around the same time, cash begins to flow freely.
Interested in more info on Clearwire? Add it to your watchlist.